$ Getting Control of Our Finances $

By Patsy Norwood ~ © 2008 ~ All Rights Reserved

Financial Challenge # 4 ... Avoid Debt! How? Here are some suggestions ...

Learn the difference between wants and needs. This one gets us all doesn't it? For example how many times do I say that I don't have anything to wear when in fact, my closet is full. Maybe what I'm really saying is … "I don't have anything I want to wear” or when we or our children need a new pair of shoes do we shop for the latest style or most popular brand regardless of the price or do we shop for the best shoe for the lowest price? That little word 'want' is the problem here … we want what we want when we want it and we don't want to have to wait for it!

Use it up, wear it out, make it do, or do without! As Dave Ramsey, the financial goo-roo says "live like no one else now so that you can live like no one else later." Now there's nothing wrong with having nice things but if we have to go in debt to get them, then maybe we should wait.

Another way to avoid debt is to have an Emergency Fund! Here again I'm going to quote Dave Ramsey. He says we need an emergency fund of at least $1000 on hand at all times. I can hear some of you now … How do you get an emergency fund when you don't have any money? That's a good question! How about having a yard sale, Or doing odd jobs for someone, and of course we can always sell some of our stuff … Wait a minute, you mean I have to sell some of my STUFF? Ladies, it's the acquiring of this stuff that more than likely helped get you into debt in the first place, so why then shouldn't it be used to help get you out? The problem's not usually getting the money; the problem usually comes when we want to spend it on something else once it's in our hands.

Operate on a cash basis. Ladies this is the single most important thing we can do to help us stay out of debt. After bills are paid each pay period take what's left and divide it up into the number of weeks you have until you are paid again. Take each weeks allotment out of the bank at the beginning of the week and pay for everything with cash instead of writing checks or using your debit or credit cards. When that week's allotment is gone you're finished spending for that week and here's an added benefit to operating on a cash basis … It will also make balancing your check book and bank statement easier.